The last 24 hours have brought declination for the cryptocurrency market as the largest digital currency by market cap, Bitcoin’s price has descended by 4%. The other major altcoins like Ethereum, Ripple, and Bitcoin cash fell by 5%.
The downfall in the cryptocurrencies has been attributed to the unfavourable decision made by the US Securities and Exchange Commission (SEC) regarding the Bitcoin Exchange Traded Funds (ETFs). Right after SEC’s rejection, Bitcoin’s price dropped from $6400 to $6250. However, the price bounced back to $6450 before stabilising at around the $6000 level.
Like Arthur Hayes, the CEO of BitMex had hinted, it is possible that Bitcoin is laying low in the $5000 range before it finally sprang up. Bitcoin will need a significant amount of time before it recovers and rallies above the $6000 level. The cryptocurrency has displayed an impressive stability since the 8th of August as it has been trading continuously around the $6000 level.
Though the rejection faced by the virtual currency resulted in the market’s fall, the quick recovery from the shock reflects the strength of the cryptocurrency market. The investors which form a rather important part of the market were less affected by SEC’s decision as they were aware of the rejected ETFs being tradable instruments based on derivatives.
Earlier this month, Brian Kelly, an experienced investor had portended that the final deadline to take any decision regarding ETFs could extend to February 2019. SEC has no substantial reason to prioritise looking into ETFs. Therefore, investors can expect more delay as far as the ETFs are concerned. In addition to this, Kelly said that if the market’s momentary downfall is the outcome of the ETF decision, the investors are overreacting as sooner or later the industry will get hit by the ETFs.
Kelly acknowledged the fact that investors sincerely hoped for the approval of Bitcoin ETFs. Nonetheless, the events that unfolded opposed the investor sentiment. He went on to say,
“A little spoiler alert, on September 30, SEC will likely postpone it again, because the market is not ready for it and the SEC hasn’t had the answers to their questions yet.”